Will Groupon Feel the Effects from Facebook?

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Summer 2011 is an energetic one for the IPO market. Rumors that the big daddy of social media, Facebook, plans a $100 billion IPO next year have analysts buzzing again. It won’t be long before talk turns to how much of an impact Facebook’s possible news will have on Groupon, which announced its $750 million IPO earlier this month.

“Groupon is not a typical social media company, but it’s included in that space with Facebook and Twitter, and any positive news is going to bring more interest into the fever pitch in that area,” said Morningstar IPO analyst Bill Buhr. “The only negative that I can see is if Facebook moves up its IPO to this year. The same timeframe would steal the thunder from the others like Groupon.”

LinkedIn went public in May, and its stock shot up past $100 per share on its first day of trading. After the hype, Groupon followed with its own IPO announcement.

“Groupon should be happy they moved up their IPO. I didn’t think they were going to file when they did, but after LinkedIn, they probably thought they should go ahead,” Buhr said.

There will be plenty more IPOs coming up of companies with greater profitability and higher barriers to entry – like the social networks with hundreds of millions of followers, said Sucharita Mulpuru of Forrester Research, in a recent interview. "Those will be wiser investments. Give Groupon time to actually earn its valuation."

So the only other major web property left for speculation is Twitter – and some think that will also happen within the next year or so.